3liteDragon
Member
Yea that’s not how this works lol
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Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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PaintTinJr
Member
If the deal was by a $1T company or less then I would expect that outcome too, but as has been mentioned too many pages back in this thread, MSFT's market cap is close to UK economic activity levels. The US doesn't seem to mind $T mega corporations anymore (unlike the AT&T/Cable and wireless days when the £ was strong against the dollar by 2 to 1) because they have the largest economy, lobbying(bribery as we deem most of it in the UK) is normal business in the US and probably they feel the mega corp US size vs China mega corp size is a battle they'd prefer US companies win. But these companies being this powerful and gaining more power isn't good for countries like the UK, and as they gain power/wealth at this level, that has to come from somewhere IMO, and that somewhere is the countries like the UK and that is reflected in the trend/strength of the currency.
SixPin
Neo Member
What you and I think is irrelevant - the CMA has surveyed companies, accessed Activision's internal documents and emails and after assessing that evidence, they believe that the Cloud market will grow and that Activision will likely put their content there.
Also, I don't think cloud gaming doesn't have long term, I actually think it's the future of gaming , not now of course.
I would just highlight the following points:
- at what costs? and for who? I would suspect that MS is going to argue that the open license for BYOG that they are offering is much better than that ABK would offer
- ABK disputed that would be the case.
Whether those points are enough, not sure. I agree with the first one, not sure the second one.
Varteras
Gold Member
You don't spend $70 billion (almost an entire year of Microsoft profits) to acquire something to just "shrug it off" if it doesn't work out the way you want. Especially considering that revenue that ABK makes is going to take a hit from cannibalized GamePass sales, lost sales from any games you don't release on competing platforms, and reduced sales if your competitor makes a successful shooter to counter.
It's also not just the $70 billion Microsoft would be spending to buy ABK. It's the $7 billion they spent on Zenimax. The billion or two they likely spent on their 2018/2019 acquisitions and studio creations. The money they lost putting their own games on GamePass. The money they spent to get third-party games on there. This is a strategy 6 years old already that has yet to really move the needle despite a bunch of money already spent trying to move it.
This is not peanuts to Microsoft. Not a single well-run company in the world would spend an entire year of profits in one shot lightly. If that needle doesn't start seriously moving after this, someone is getting fucked. Let's not forget that Microsoft already almost closed shop on Xbox once before and it took Phil Spencer giving Satya Nadella the best head he's ever had to keep the brand. Sooner or later they'll want results. I don't think Xbox itself is going anywhere, but their strategy and the people who championed it very well might if this deal doesn't make great strides in changing market share.
Then again, Microsoft has made a number of boneheaded decisions over the years so who knows.
feynoob
Member
It's how that works.
You said that Sony had a deal with marvel to make spiderman.
In that regard, we can say that MS had a deal with Bethesda to make Starfield exclusive to Xbox.
Neither company has any rights for these games on their system due to these deals.
FlyyGOD
Member
Yup just like Sony did with Street Fighter 5 and Final Fantasy right?
Orbital2060
Member
Regulators be regulatin'
ChuckeRearmed
Member
Except you do if you are Microsoft. Even with this acquisition Microsoft is not under any kind of risk. That's the strongest point of these big corporations (and danger for some). They can afford such losses and live with them as it does not affect their operations. And Microsoft is one of the most diversified big tech giants out there.
That's different you know. Because after 7 years SF is back on Xbox
And FF has potential to reach FF in 100 years
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Varteras
Gold Member
It's not the company at risk. It's the people constantly costing them money to not get anywhere.
ChuckeRearmed
Member
As long as Azure does good, none of stakeholders care.
feynoob
Member
Cloud gaming right now needs content. And this deal is the perfect chance for them to get that content.
By making MS sign those deals with cloud gaming companies, they can have those contents instantly.
Look at Nvidia. They managed to get Xbox games thanks to this deal. They might also get Activision games if this deal passes.
Ar¢tos
Member
Sony partially funded SF5 and FF7 exclusivity period has ended, if it's not on Xbox ask Square why... I would like to know why Octopath Traveler 1 is not on PlayStation since the gamepass contract has ended.
feynoob
Member
feynoob
Member
Isn't octopath traveler 2 coming playstation, while skipping Xbox?
I don't think that is a good example.
Varteras
Gold Member
NOOOOOOOO! Now who will spam threads? We need a new champion!
phil_t98
#SonyToo
That’s because Sony made it about call of duty with the regulators. Read back at the beginjng
FlyyGOD
Member
Yup and Microsoft is funding Zenimax and future Activision games too.
Punished Miku
Member
I will be pressing the V and R keys to pay respects.
feynoob
Member
I could have taken the mantle, but I don't have wings sadly. I cut them off too early.
POKEYCLYDE
Member
Any LTV model would have to look at new customers that switched to Xbox because of CoD being exclusive. Which is a small number. The cost/benefit analysis is only looking at one decision in a vacuum. (As it should)
Very high costs and little benefit to make CoD exclusive. That's the decision the CMA has reached. If you start looking for ways that Microsoft could make up the costs, you'll find ways they could do it.
In your example, you double the current Gamepass subscriber number and charge the entire subscriber base $1.50 more. This makes up for the costs/losses of not selling on Playstation, but it's using already established Xbox users along with "switchers".
The math below is spicy, basically shows that even if the switchers paid nearly 5x as much on Xbox than they did on Playstation, the cost of making CoD exclusive outweighs the benefits.
Lets say there are 40M Playstation CoD players. And 15% of them (6M) left Playstation and joined Gamepass.
Not accounting for MTX and Battle passes, just base game/sub price. At 40M x $70, losses for a year from taking CoD away from Playstation is $2.8B, if you only account for the 70% Xbox would make from the purchases, it would roughly be $2B.
Now onto the 6M that switched to Xbox, all of which jumped into Gamepass, never unsubscribed. At an average price of $10 a month, that's $120 a year just for the subscription, Microsoft would be making $720M. Maybe you think all 6M PS switchers would pay for ultimate at $15. That brings up the "benefit" to $1.08B.
Maybe that's not enough. You want Gamepass prices to increase. Let's say all 6M PS switchers are happy to pay $20 a month for Gamepass, that's $240 a year. That's $1.44B
The benefit of those 6M new Gamepass users paying above and beyond what Gamepass currently charges still falls short of the cost of taking CoD away from Playstation. To the tune of $560M a year, and this is assuming the 6M that switched would pay nearly 5x as much as they did on Playstation.
If you average out actual spending habits, MTX and battle passes, the cost of taking CoD off Playstation increases. Where as the 6M switchers would average out probably lower than the $240 a year.
Not accounting for MTX and Battle passes, just base game/sub price. At 40M x $70, losses for a year from taking CoD away from Playstation is $2.8B, if you only account for the 70% Xbox would make from the purchases, it would roughly be $2B.
Now onto the 6M that switched to Xbox, all of which jumped into Gamepass, never unsubscribed. At an average price of $10 a month, that's $120 a year just for the subscription, Microsoft would be making $720M. Maybe you think all 6M PS switchers would pay for ultimate at $15. That brings up the "benefit" to $1.08B.
Maybe that's not enough. You want Gamepass prices to increase. Let's say all 6M PS switchers are happy to pay $20 a month for Gamepass, that's $240 a year. That's $1.44B
The benefit of those 6M new Gamepass users paying above and beyond what Gamepass currently charges still falls short of the cost of taking CoD away from Playstation. To the tune of $560M a year, and this is assuming the 6M that switched would pay nearly 5x as much as they did on Playstation.
If you average out actual spending habits, MTX and battle passes, the cost of taking CoD off Playstation increases. Where as the 6M switchers would average out probably lower than the $240 a year.
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Varteras
Gold Member
Ar¢tos
Member
You think Sony moneyhatted.... Octopath Traveler....?
I think its more Square lack of logic and platform lottery, the platforms for their games seem random at times and make no sense.
phil_t98
#SonyToo
So your opinion is protect one mega corporation from another mega corporation. At the moment Sony dominates and they use that position in the market to get favourable marketing deals and use their position as in resident evil to make sure it doesn’t hit gamepass. So that’s Sonys own way all the time. We don’t know what other deals of this sort are out there but Microsoft must know something in requesting more documents on that type of deal.
You just prefer your corporation against another corporation. Did you massively oppose Bungie being bought? Yes not as big as Activision of coarse but they still been bought by the biggest player in the gaming sector
feynoob
Member
I didn't say they moneyhatted.
That game is not a good example for the situation here.
3liteDragon
Member
Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
GHG
Member
Ar¢tos
Member
I meant that they probably haven't ported ff7r to Xbox because the sales wouldn't be worth it, since they no longer have forced exclusivity, the same way it is probably late to port octopath traveler 1 to ps4.
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HoofHearted
Member
Wow… so we are now entering the narrative of “CMA should block this deal because if they don’t, it’ll make the UK look bad?”
This thread continues to deliver…
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phil_t98
#SonyToo
One game that’s already out
For that Microsoft have
Minecraft and it’s spin offs
Doom still selling on other stores
Elder scrolls still getting updates
Realeased doom 3 on multiplat
Constant updates for other games already released on multiplat.
But people still expect nee games such as starfield to be released on other platforms which is a new IP. The defensive of a lot of other stuff Sony hasn’t released is that it’s their own IP created by them, well starfield is now Microsoft’s IP owned and created by them.
GHG
Member
Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
This would be nice but will never happen due to the way corporate America is structured and how influential it is politically.
phil_t98
#SonyToo
It’s funny because if you look earlier in this thread all the people against this purchase were saying the CMA were the ones in the know and what ever they do the EU will follow and the FTC will copy.
Now the CMA have so far approved much of this the narrative has changed to the CMA know nothing. It’s unreal the twist and turns some people are doing
Varteras
Gold Member
Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
No mergers over $5 billion seems awfully restrictive and I don't know how I feel about no court interventions.
M1chl
Currently Gif and Meme Champion
Won't be long until someone would start vomiting "protect Free Market", "muh capitalism" and so on.Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
I think these things would be good, but looking at current day America, this reads like some sci-fi.
diffusionx
Gold Member
In general, the federal government is way too permitting over mergers and has been the last 40 years or so. There's always a balance and we need to swing back the other way.Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
mansoor1980
Gold Member
Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
This sounds dumb as hell.Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
I get that FTC wants to have final say on mergers without federal judge intervention, but they need to be more factual and less ideological for that to be the case.
Like, we can argue about conclusion of CMA/EU regarding ABK, but we cal all agree that they extensively researched topic.
But the moment Lina Khan was appointed as a head of FTC, people thought that they would sue Microsoft for ABK because "Big tech bad." And fact that FTC is 0:7 speaks for itself.
And that monetary value of mergers is also stupid. Like really stupid.
I agree that there needs to be a balance. But this is crazy swing into another direction.
And since Republicans controls the House, there is no way this will pass. And I expect that even some Democrats outside of Sanders and Warren fans will have a problem with this. It's more probable that FTC will get even less money thanks to their recent failure because many people views them as a waste of taxpayer money. And that image is entirely self inflicted.
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HoofHearted
Member
I find it rather interesting based on various comments here how many people in this thread either don’t fully understand or misinterpret what purpose a regulatory agency serves….
GHG
Member
That's the thing, you can't go from one extreme to the other in a single move, it's just not feasible.
Nothing is structured in a way that would make such a move viable. The FTC and by extension the SEC have been in a coma since their inception, hence the current situation.
PaintTinJr
Member
So $100B-200B company is the same as a company worth 10-20x that amount and the risks are the same? Calling Sony a mega corporation in context of Microsoft, Amazon, Apple, Google, Meta, etc is a stretch, and a stretch when adding in the context of UK economic activity.
I would be against this deal if it was Sony trying to buy Activision, and I wasn't a fan of them buying up Bungie.
Gamezone
Gold Member
I hope Microsoft retires it as they did with the Bethesda Launcher, and transfers everything to Steam.
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Topher
Gold Member
Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
Congress won't be approving or disproving this. Ultimately a judge decides of the merger is legal or illegal. Congress make laws. Agencies implement those laws. Courts determine if the laws/decisions are constitutional/correct if challenged.
That twitter post is a pipedream. Congress doesn't have the ability to shut out the courts from intervening.
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feynoob
Member
They went too loco.Bruh… I mean I don’t think Congress is approving this anyway but this is still insane lol.
feynoob
Member
????
Look at Yakuza series. Sega got a bag of money from MS.
Square could get that money from them.
I am sure that someone would file a case to claim it to be unlawful. I had to figure out which bill it was, it was introduced by Warren and a couple of other Democratic senators.
https://www.congress.gov/bill/117th-congress/senate-bill/3847
It's a non-starter imo.
gothmog
Gold Member
See ya asshole.
DaGwaphics
Member
I doubt these regulatory groups would see it like that. The timed exclusives from the dominant party could be used as an almost complete foreclosure strategy against rivals. Exactly who is buying the consistently a year or two behind box?
Especially in a case where the dominant party is leveraging their size and the % of sales expected on the larger platform to negotiate these deals in dollar amounts that are illogical/unpractical for their smaller rivals. That's specifically why Sony is careful how they do that. They could probably afford to get 20 or 30 times more timed exclusives than they do, but the anti-competition probe against them would likely open sooner rather than later.
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